Working contract in tech: the good, the bad, and the perks

No NDAs were harmed in the making of this post

Sometimes contractors get laptops like in this photo by Marvin Meyer on Unsplash

Tech embodies innovation: out in the physical world, on our devices, in our thinking. A large part of what makes the tech industry so impressive is the fast-faced buzz of excitement for development. It’s the constant desire to push ahead toward a product or a process that hasn’t yet existed in a better, usable form. To accomplish that, you need flexibility. In fact, to successfully build how no one has dared to before, you need a lot of it.

Tech companies need the ability to scrap entire projects in case they crash and burn, or to supplement existing hands on an upcoming release. Enter the contingent workforce, the unsung heroes of the tech world.

Who makes up the contingent workforce

The U.S. Bureau of Labor Statistics defines contingent workers as “those who do not have an implicit or explicit contract for ongoing employment.” In tech, these workers are known as temporary hires, vendors, or contractors (also referred to as TVC’s at Google).

All three roles have different designations and for the sake of brevity, I will only focus on contractors here.

Contingent workers are not full-time employees (FTEs) but they may work full-time (40+ hours a week). They are typically hired by a third party staffing company to work on one specific project for a client company.

Contractors are not to be confused with independent contractors who fall under the 1099-MISC tax form. Independent contractors are hired for their skill and are integrated fully onto teams where their expertise will optimize the workflow. Tech contractors work under a W-2 and are typically isolated from FTEs at their client company (in accordance with their legal differentiation).

Many contractors are not hired for their skills per se, but for their talent of handling grunt work that does not require any specific education or a background in tech. For this reason, not all contractors who work in tech, desire to continue working in tech. For some, a contractor job is just like any other job to pay the bills and is a jumping off point while they pay for their degree or some other form of education.

The nitty gritty details about being a contractor

All contract job pay rates are valued at 20–30% higher than the corresponding full-time role. For the client company, the cost of paying more per hour is offset by the amount of money saved in the long run since 401k and health insurance benefits are not their responsibility.

Because of this however, since a contractor is not hired directly by their third party staffing company either, contractors are only paid for hours worked. A contractor will not get paid for national holidays unless they are permitted by the client and choose to work on those days.

When a contingent worker successfully lands a role, a percentage of their pay goes to the third party company for finding them the job. Depending on the worker’s negotiation skills, the resulting take-home hourly rate may greatly differ from other members on their team unless the client company has set up a standard rate of pay for their contingent workforce across a particular department or job description. Facebook is one of the companies with a mandatory base pay across all offices in the country, with slightly higher base rates in cities with a higher cost of living.

It should be noted that because of their legal status, contractors do not get “laid off”. Termination in the contract world simply means your contract will not get extended. This is not to downplay the constant instability and fear contractors have for their jobs, but rather to mark the difference between getting fired unexpectedly versus taking the risk of a 3-month contract only to find out it is indeed just a 3-month project.

Workplace culture for contractors

There is a conscious effort made, either large or small, by part of the client company to distinguish their full-time employees and interns from contingent workers.

TVC’s at the major FAANG companies (e.g. Apple, Facebook, Google, Amazon) wear different badges. At times, they work entirely separate from FTEs in different buildings altogether and in extreme cases, cannot access any other building or floor than their own. They are not allowed to participate in company events, unless explicitly stated that they are allowed to do so.

Contractors are also not given the full range of perks at their workplace. For example, a contractor may have access to the food and bicycles around campus, but cannot order from the online company merchandise store or use the discounted dry-cleaning service available.

All of the above, to be clear, is not workplace discrimination. It is the way companies have been able to balance having different tiers of workers and protect their workplace dynamic. What does become iffy is hearing horror stories in the news of workers who were not given proper restorative services for work that could affect their mental health or workers whose buildings are not kept in safe or hygienic conditions because no FTEs work in that building.

From the FTE point of view, contractors are essential, but they are temporary. Even if everything were ideal, it would be hard to depend on a contractor who, more than likely, will be off the team in a year or so.

My personal experience as a contractor

I have been working as a contractor in tech for 2.5 years as of November 2020. I’ve worked at three of the big FAANG companies and one large, non-FAANG company. It would be easy to describe my experience as the sum of all of the office snacks I got (Facebook is the best for refreshments and snacks, while Apple had vending machines), but the best part about working in tech has been the lack of complacency.

Once hired as a contractor, right away you learn to stand on your own two feet and seek out knowledge and skills even if no one is pushing you to do so. I came to tech with a B.S. in Biology and years of experience as a translator, but I didn’t stay there. I’ve learned to code on the side, I’ve studied major concepts in AI to understand the importance of my past work as a data labeler, I’ve learned about career paths I would’ve never thought possible (like conversation design!) and I’ve met the most amazing people in this field.

Facebook has drink fridges for days like this photo by Coco Tafoya on Unsplash

Don’t get me wrong, some of the perks are definitely nice and not having to cook lunch (pre-COVID, before the offices went remote) was a blessing. Yet all of the ping pong tables and espresso machines in the world cannot match the satisfaction of gaining so much knowledge or of meeting the single two best people in the world (my former teammates at Apple).

Someday I do hope to make a company out there very happy by accepting a full-time position with them, but for now, being a contractor has been worth it, in spite of the hardships.

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